Senate Democrats on Tuesday abandoned all hopes of passing even a slimmed-down energy bill before they adjourn for the summer recess, saying that they did not have sufficient votes even for legislation tailored narrowly to respond to the Gulf oil spill.

Although the majority leader, Harry Reid, Democrat of Nevada, sought to blame Republicans for sinking the energy measure, the reality is that Democrats are also divided over how to proceed on the issue and had long ago given up hope of a comprehensive bill to address climate change.

There will be a lot of analysis of the biophysical impact of our continuing inability to act on the twinned issues of climate change and energy in the coming days, I am sure. But, early in the morning, I want to quickly point out the cascading disaster this will cause in the environment and development policy world. What most people don’t understand about the Copenhagen meetings, which ended in such confusion without a clear agreement, is that most of the key actors decided that it would be best to wait and see what the US managed to pass for its own internal purposes, and then try to work to that to ensure that the US joined the next major global climate agreement (remember, we never did sign Kyoto). Copenhagen wasn’t really a failure the way many people thought – indeed, had they plowed ahead with an agreement in absence of American climate and energy legislation, they would have set the stage for Kyoto II – where the US, once again, refused to sign on to standards that it had not already agreed to.

“Why is it that for the last 20 years the United States is unable to have a bill on climate change? What’s happening? What’s going on? It’s very complicated to understand,” said Brice Lalonde, France’s top negotiator.

“For a lot of us, we cannot wait for the United States. We have to go on. It’s like Kyoto,; we just go on” Lalonde said, referring to the 1997 Kyoto Protocol treaty that the U.S. joined but never ratified, leaving European countries to largely carry the weight of reducing greenhouse gas emissions.

Added Pa Ousman Jarju, lead negotiator for the small West African nation of Gambia, “We cannot rely on the U.S., because everything the U.S. is supposed to do depends on domestic policy. So we’re not going to get anything from the U.S. in terms of tangible commitment.”

He charged that the international community is “no longer hopeful” that America, the world’s biggest historic emitter of global warming pollution, will ever pass a bill to cut emissions. That, he said, leaves the global community with two options: “Either the rest of the world continues to do what they were doing before, or the whole multilateral system will collapse.”

What we were doing before was not good enough. I am not all that sure that the net outcome of business as usual is all that different from a complete collapse of the environmental component of the multilateral system as we understand it. The US simply has to be on board, or this is all for naught. UN Climate Chief Christiana Figueres put it this way:

“Whether the United States meets the pledge that it put on the Copenhagen Accord via legislation or whether it meets it via regulation is an internal domestic affair of the United States and one that they need to solve,” she said. “What is clear is that at an international level the United States needs to participate in a a meaningful way, and in a way that is commensurate with its responsibility.”

Credit to her for saying this clearly, and for suggesting that content (getting some sort of formal controls on emissions in place, whether through regulation or legislation) is a lot more important than form (insisting that everyone pass legislation to somehow bolster the legitimacy of these efforts). Now, let’s see if the Obama Administration is willing to really use the newly-empowered EPA as a blunt object in the fight to control greenhouse gas emissions – at this point, I see no other way forward for the US. Which means no other meaningful way forward for the rest of the world.

8 Responses to “ The Death of the Energy Bill: Who cares? Basically, everyone. ”

With regard to the US position on Kyoto, the Byrd-Hagel resolution made their reasons clear. The basic question was whether the Kyoto protocol was really addressed at meaningfully reducing carbon dioxide emissions, or whether it was primarily aimed at crippling the US economy and effecting a massive wealth transfer to the developing world while making virtually no discernible difference to the climate.

The US position (including that of the Bush administration) was that they did accept AGW as a threat, but that if carbon dioxide was a problem, then it was a problem wherever it came from. And therefore if Kyoto was to address the problem it also had to impose caps on the developing world, as well – or China’s and India’s emissions would rapidly overtake the West’s and undo all their efforts.

Since China and India quite sensibly refused (they’re not stupid – they know what the consequences for them would be), and since the UN’s own projections showed that Kyoto itself would have little effect on climate change even assuming the models were correct, the US ratifying it would serve no purpose.

As it happens, the US subsequently did rather better on limiting CO2 emissions than some of the actual signatories, but still their refusal to ratify their treaty because of their AGW denial is a useful stick to beat them with.

(Insignificant nit-pick – the US did actually sign Kyoto, but the Senate refused to ratify it.)

It was actually a significant victory for the US position at Bali when it was agreed that the developing world would have to accept caps too, and it was for that reason that the US re-entered serious negotiations.

However, this didn’t last, when it turned out that China was only offering meaningless “carbon intensity” limits (i.e. they still emit more and more CO2, but they promise to make even more money doing it), and when Copenhagen turned into a negotiation for a massive “green fund” that the West would pay to the developing world to help them transition and compensate for the loss. i.e. it was just another massive wealth redistribution scheme that would have no effect whatsoever on the climate. The US, naturally, were never going to sign.

Everything else now is face-saving politics. Having promised the world, now they have to get out of their promise and somehow shift the whole blame for the failure to the Republicans and right-wingers. It doesn’t matter that their legislation will almost certainly fail, what matters is that they can truthfully say that they tried everything to get it through.

Until we face the fact that stopping CO2 emissions is going to mean stopping everyone emitting, China and India and Africa included, and it’s going to hurt, and nobody is going to be paying them a cent to ease that pain, then nothing is going to happen. If you really think this is the end of the world we’re facing, that price would be worth it. You would do it anyway because you had to. But somehow, I don’t think the politicians are that certain. Do you?

While I have heard the argument that climate agreements are really about wealth transfer, I think it is a bit much to argue that Kyoto was principally about crippling the American economy. First, if you want to make that argument, you really should argue that it was about crippling most of the advanced economies – all of whom were hit with significant reductions. But that is beside the point, really. The point you have not addressed here is a simple one: why are we demanding significant cuts from countries that emit nearly nothing (for example, every country in the Amazon Basin – Brazil, Venezuela, Colombia, Ecuador, Peru, and Bolivia – generate a combined 2.2 percent of global greenhouse gas emissions), and whose problems are significantly worse than anything we are facing here. I do not mean to downplay the very serious effects of the economic downturn on American households – the impact has clearly been devastating everywhere from Detroit to rural South Carolina. But we do have functioning social safety nets here that do not exist in other places – starvation and death from exposure remain exceedingly rare here (though it is appalling that in the world’s largest economy they should occur at all). No country in sub-Saharan Africa will ever challenge the economic strength of the US – hell, all of Africa together won’t manage this in any foreseeable future, no matter what sorts of regulations we put in place. Now, I am in agreement that China and India need to get on board – they are big emitters now, but more importantly they are economic powerhouses whose economic development will not be crippled any more than ours by greenhouse gas regulation.

While you are correct that Kyoto – at least the final agreement – would not have done all that much for climate change, you are missing an important point about geopolitics here. Kyoto was a baseline, a starting point for future negotiations. If we got something passed, however inadequate, it could provide a new baseline from which future agreements could spring with ever-more adequate goals (international agreements are typically pretty incremental, not transformative). I would have taken a hobbled Kyoto if we could have built on it meaningfully now . . . but there are a lot of people hell-bent on trying to get back to pre-Kyoto negotiation levels. If they succeed, then Kyoto will have failed.

I am largely in agreement with your position on China – they really do have much greater responsibilities than they want to own, and their arguments evading those responsibilities are largely facile. I suspect they will come around slowly, but I have no solutions there. But I think you really do an injustice to the adaptation fund. It is not a wealth transfer scheme – it is an effort to facilitate countries as they try to jump entire generations of dirty technology in their development, and as they have to build in all sorts of new activities and safeguards to address the impacts of climate change on their development pathways (the latter is one of my specializations, and what I will be working on at USAID for the next year or two). Does this mean that the advanced economies will have to pour some money into the developing world? Yes. But this is meant to be an investment – if Stern is correct about the economic impact of climate change (I suspect he is in the ballpark – his methods and analysis were a bit conservative, which is a good thing in my opinion), and this fund does help in the creation of much greener development pathways for the developing world that limit the rate and scope of climate change, this is going to look like a fantastic investment.

I don’t want to wade into this, because it strikes me as too “talking head” and combative, but I really have an issue with labeling anything like this fund as “wealth transfer”. I think if people want to use that label, then they should be forced to weigh that particular transfer of wealth against the astonishing transfers of wealth from these countries to the developed economies under colonialism. If we do the math on that, once again we come up looking cheap – even in India. We built our economy on their backs, and we live the way we do because billions do not – don’t we owe them anything?

I believe, by the way, that our failure to address climate change is thoroughly bipartisan – Kyoto was not ratified because of a bipartisan effort in the Senate. Sure, the Democrats blame Republicans for this most recent failure, but who are we kidding? If the Democrats really wanted to do this, they could. We’ll really see what Obama stands for when it comes time to use the EPA’s court-backed ability to regulate greenhouse gases without additional legislation – if the Dems really mean it, they will use this power to start capping our emissions. My guess is the EPA will end up neutered again.

Lowering the concentration of CO2 in the atmosphere does not mean that everyone has to lower emissions – it means that the most egregious emitters (and the US is just lazy in its emissions-to-energy ratio) will have to cut a lot, while the developing world will not be able to emit much more at all (effectively a cut, as their populations and economies grow). However, you are quite right – this will not be completely painless. However, it will not be half as bad as those arguing against caps or other controls claim. And I think the arguments for the economic impact of climate change are quite clear and compelling – the pain is inevitable now. The question is when, how bad, and if we get to choose the form of that pain. Most people want to believe we have other choices. I don’t think we really do.

The advanced economies, yes, but the reason for the 1990 baseline (rather than 1997 when it was adopted) is generally reckoned to be the differing emissions profiles of Europe and the US during the early 1990s.

The question of where the cuts should fall isn’t straightforward. First, the Amazon basin may be emitting 2.2% of what we emit now, but that’s 11% of what the world *ought* to be emitting, if we make all these cuts. Secondly, we want to make the maximum cuts for the minimum cost in wealth generation, so as to minimise the net economic loss to the world, so arguably cuts should be directed first at those places with the worst energy intensity. (Energy/GDP – PPP units if you prefer.) And third, if you don’t have universal caps then industry will simply export their emissions. The Amazon will soon be filled with factories. The problem with trying to regulate the economy is that it operates by adapting to find ways round problems, and to exploit available resources, and it sees regulation as just another problem/resource. If you offer a carrot, they will find some way to eat the carrot without paying for it, and if you offer the stick, they will seek out a way to dodge it.

I certainly agree with helping developing countries to leapfrog dirty technology, but giving them money won’t do that, because money isn’t the problem. The problem is their ability to use it efficiently. They already have all the resources and wealth they need to match the West, but it isn’t organised in the right way. This is a difficult subject, because even in the West we don’t really understand what is required or exactly how it works – our system sort of evolved by accident, without us being aware of it. But we do know that giving them money is not a solution. We need to give them the ability to create wealth.

Incidentally, I don’t mind at all weighing the transfer of wealth under colonialism, which in objective terms was generally in the other direction. (Although I oppose colonialism for other reasons.) You see, wealth is not a zero-sum game in which there is a fixed amount of wealth just lying about, and it’s a question of how big a share of it you get. Wealth is created by ingenuity, by experience, by technology, by organisation. Resources only *become* resources through us finding ways to use them. Otherwise, they’re just rocks and trees. (The same sort of thing applies to human resources, although it’s a bit more complicated.) We went over there, through our own ingenuity and knowledge we turned useless rocks into valuable resources, and then yes, we took most of it for ourselves. Everybody did – or tried to – we were just better at it than most. And one of the most important things that wealth created was the opportunity for us to invent a better way, a better attitude to the world, more generous than colonialism. That isn’t intended as a *justification* for what was done (it was far from optimal) – just a historical observation.

And that better way isn’t better simply because of its generosity. The more wealth is created, by everybody, the better it is for everybody. If the developing world became developed, it would be a vast boost for the standards of life of the already developed countries, too. We *want* them to have our capabilities. This isn’t a zero-sum game.

We have a saying here about “crabs in a bucket” – it is said that if fishermen drop crabs into a bucket, it can be nearly filled without any of them escaping because if any crab climbs on top of its neighbours towards the rim, all the rest will pull it down and drag it back. They spend all their time fighting each other to escape and as a result none of them do.

There are a few points here I really must take issue with. First, your read of colonialism and its impacts is a bit wide of the mark. I am not suggesting you are an apologist for colonialism. And I have tremendous respect for the knowledge and ability of people living in the developing world – my career has been built around trying to better understand and convey this knowledge to a wider audience. The fundamental problem that I think most market-based development solutions totally fail to acknowledge – comparative advantage, as it is understood in neoliberal economics, simply does not apply to the developing world. The countries in the developing world never chose their own pathways – these pathways were chosen by external entities (mother countries) and by the time independence came around, the global economy as we understand it had already started to crystallize. I do understand how one might be skeptical of anyone who blamed their current situation on events from 50 years or more ago, but in this case the argument is empirically demonstrable, and the impact of colonialism was so serious as to make the competitive participation of these countries in a free market completely impossible. This is not to say that every country was well managed all the time – but, as I explain to my students in my sub-Saharan Africa class, the staggering challenges of building a nation/state/economy in the wake of colonialism were so gigantic as to overwhelm even the most competent and honest leader. Nkrumah in Ghana wasn’t half as bad as many think – I believe he was a bit of a political genius, actually – but eventually he was trying to juggle too much: placating traditional leadership while neutering them in the new state, growing the economy beyond natural resource dependence without allowing for either the complete reestablishment of colonial relations with Britain and the rest of Europe or the emergence of an economic oligarchy that would overwhelm the state (and, to be honest, him), and managing the necessary emergence of bureaucratic power without the resultant emergence of rampant corruption and inefficiency (here he failed utterly). I submit that nobody could have pulled this off, and the fact that Nkrumah pulled it off for nearly nine years is stunning. How much of the disastrous later period of his rule should be attributed to his failings, and how much should be attributed to circumstances, is really hard to say – though he clearly was not a perfect leader, by any stretch.

Yes, the Europeans came and defined the resources and therefore gave them value in a certain market and political economy (and, as you point out, took most of it for themselves). But your comment reads like this process was somehow a gift to the colonized (which I doubt you were going for) – we never intended to let them compete on the wider world stage as equals, initially because of racism mixed with economic imperatives, and now mostly because of path dependence and economic imperatives. Gold was not useless to the Akan in Ghana – they were brilliant traders busy outthinking their European counterparts as early as the late 1700s. It took a Ghanaian to figure out how to get cocoa to grow in Ghana, despite years of efforts by British colonial scientists. But when all you are allowed to do is produce the raw materials, you live with the boot of the world on your neck. The British understood this completely when they intentionally decimated the Indian textile industry – they wanted raw materials for their own industry, and no competition from the Indians – this allowed for greater control over this territory, its people and its wealth.

While wealth is not zero sum, it is not infinately fungible. The recent economic crisis is just the latest demonstration that wealth is, in the end, anchored to something in the world, and when that links gets too tenuous, values become meaningless. We are not generating enough new resources or materials to keep up with the growth of population, let alone allow for the entire world to live at our standard. That is the brutal fact – we live the way we do because 3-4 billion do not. And nothing we do related to economic growth will change that, because growth somewhere necessarily limits growth elsewhere (though not at a one-to-one rate, of course). I fear, however, that we are slowly moving toward a zero-sum state (it is a ways off, though). An energy revolution (i.e. fusion – effectively free energy from seawater and whatnot) could change this math a lot. But chugging along as we are moves us closer to zero-sum. And for most of the developing, zero-sum is already here. We are, indeed, dangerously close to crabs in a bucket.

Well, I certainly didn’t intend any apology for colonialism, so you may set your mind at rest on that score. I did find your views interesting, and want to learn more, so please don’t take any continued disagreement as a reason to give up. You’ve made some good points. I’m enjoying the exchange.

In considering the possible effects of colonialism and external control, I also look at ex-colonies like Hong Kong and Singapore, I look at Germany and Japan after WWII, who were first virtually destroyed and then controlled for many years by outsiders. I look at the south-east Asian economies. It is entirely possible to turn an economy around in a couple of decades, even to rebuild it from scratch, with the right organisation.

Remember as well, the US, Canada, and Australia were once colonies. How much did the British colonial period affect the US’s rise to prominence? Some, I’m sure, but having once been a colony is clearly not fatal.

The problem, I think is not that poorer countries cannot participate in a free market. Free markets tend to help the poorest most. The basic problem is that the markets are still not free. They face protectionism and trade barriers from more powerful countries, stopping them selling their goods at their actual prices so that the producers in the richer countries can compete, and they face protectionism at home as artificial and unnecessary barriers are raised so that corrupt officials can make money from bypassing them. (The economic damage is caused in the main not by the corruption, but by the barriers the corruption is there to bypass.) Most of the poor cannot afford the entry price to the *legal* market, and so are forced back on the far less efficient black market. And thus, both are impoverished.

Some of that was set up by colonialism. But what is the meaning of independence if you cannot change the way you operate? The truth is, there were plenty of natives who quite *liked* that way of operating, too. They *chose* to perpetuate it.

It’s a hard thing to do, and I don’t think any particular leader should be blamed for failing to pull it off. There are too many vested interests who prefer the status quo. But that’s not a problem specific to colonies.

I certainly agree that developing countries face a lot of problems that are not their fault, but are caused by the stupidity and corruption of richer nations. But I don’t think it’s fair to label this system as “the free market”, and so argue for making it less free.

I don’t think fungibility is the right word for what you mean. A particular good is fungible if any sample of it is as good as any other sample. And I’m not sure, but I think you might be confusing ‘wealth’ with ‘money’. ‘Wealth’ is stuff people want. ‘Money’ is the temporary imbalance that exists when people exchange what they want for what other people want at different times. It is a measure of the value of trading that is currently ‘in progress’.

(Apologies if you know all this stuff already. I just want to be clear.)

So if ‘what people want’ is Indian head massages, say, then people doing head massages are creating wealth. If I ask for a head massage and promise to give you one in return later, that is the creation of money. (Money that you possess, as a measure of the unrepaid favour you have done me.) If it later becomes clear that I will be unable to repay the favour, then your money becomes worthless. (This is more or less what caused the banking crisis.) And yet, no wealth has been *destroyed* as such. The world is still better off for one head massage having been done rather than none.

Now, what the free market demands is that *everybody* should be allowed to do Indian head massages. We can’t run out – because what we are really selling is our ingenuity, skill, and labour. The more people there are producing ‘stuff people want’, the better off the world is. We don’t lose out because more people are offering the service. All that means is that we have more time to devote to solving other problems.

And one of those problems that we can and do solve is natural resource shortage. We use our ingenuity to carry on solving the same problems in other ways. This is how we have progressed.

We can judge whether we are running out of natural resources by looking at long term price trends. On the whole, the evidence is that actually we’re not really running out of anything external – quite the contrary. In fact, one resource that *has* steadily gone up is the price of human labour, which tells us that in an economic sense, the one thing we are running out of is *people*! As we find more and better ways to make people productive, so they become more valuable, more desirable, and therefore economically ‘scarcer’!

I’m not really expecting you to agree to any of the above (I’m simply exchanging views), but it is my belief that the whole world can indeed live the way we do now. Not by using the technology and resources we have *now*, it is true. But if you go back a hundred years, you could not have given even the majority of Westerners the comfortable lives they have now with the technology and economy we had back then.

And if it *is* possible, wouldn’t you agree that it would be a good thing to do?

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(I should probably note that theft and taxes do spoil my simple definition of money. It is an idealisation, after all.)

[…] while back, I put up a post about how the US failure to pass climate legislation is screwing up the entire process at the global level. While the Chinese are enormously problematic, and the Indians are not much better, our domestic […]

[…] Ryan Lizza has an amazing piece in this week’s New Yorker that traces how the Senate version of the climate bill – the one backed by John Kerry (D -MA), Lindsey Graham (R-SC) and Joe Lieberman (I-CT) – really came to an unnatural, totally unnecessary death. It is a really sad story in that the bill did not have to die. But it is also the story of stunning incompetence from the Obama White House, which sold the bill down the river just at the moment the three senators might have been able to marshall the votes. I disagree with Lindsey Graham on all kinds of stuff, but to be honest he comes out looking the best in this piece. The poor man got hosed. Kerry comes off looking like a statesman, too. Even Lieberman seems forgivable for his past behavior. But the Obama administration looks to have completely blown this one, and both the US and the larger world will suffer greatly for it. […]